Food industry producers cash in on Egypt’s changing public attitudes

Compared to Western countries, Egypt’s dairy product industry is relatively small, but concurrent changes in the country’s lifestyle and in consumer attitudes have brought about a growing demand for p

Compared to Western countries, Egypt’s dairy product industry is relatively small, but concurrent changes in the country’s lifestyle and in consumer attitudes have brought about a growing demand for products that were once considered out of the ordinary.

According to a recent article in Business Today Magazine, at 40-50 kg per year, Egypt's per capita milk consumption is about 20 percent of that in many more developed countries, and of that only 15 percent is packaged in modern, privately owned dairies. But that is up from 3 percent in 1987.

One company that is trying to catch a ride on milk’s newfound popularity is Juhayna, which was founded in 1983, and is now the market leader in the country's modern dairy industry.

For the first four years following its founding, Juhayna spent much of its time obtaining the necessary permits to begin production. The company's dairy production began rolling line in 1987, with cream milk in cartons ranging from 0.25 to 1.5 liters, in addition to yogurt and juice packs.

According to Business Today Magazine, when Juhayna began production, the public viewed packaged milk as not being fresh and complained that it did not contain enough fat. Since then, many of Juhayna's original competitors—MilkyLand, Dallah and the government-owned Misr Dairy—have either lost their market share due to poor quality or have disappeared from the scene altogether.

Juhayna pioneered a generic milk campaign in 1993, at a time when other companies had little faith in marketing and were slow to adopt such initiatives. Its efforts appear to have paid off: Juhayna and Bekheiro—the company's cheaper, pouch milk brand—have captured over 60 percent of the packaged milk market. The company's total market share of other packaged dairy products is now roughly 75 percent.

Juhayna is the only Egyptian company to produce full-cream, half-cream and skim milk in four sizes. The company uses 100 percent natural ingredients, and says it does not produce the popular feta cheese that requires the addition of chemical additive GDL.

The company is presently in the process of completing a range of cheese and milk in special packaging for children, and children's yogurt will soon be added to Juhayna's product range. Sensing the growing health movement in Egypt, Juhayna introduced "light" yogurt last Ramadan. The company is Egypt's market leader in yogurt sales.

Juhayna's marketing mix includes print advertisements, promotions and giveaways. It also advertises in Lebanon and Palestine. Since profit margins are so slim in the industry, Juhayna’s revenue is dependent on high-volume sales.

Juhayna's closest competitor in the milk market, Enjoy, was one of the first dairy companies to join Juhayna in its generic campaign to increase the national market share of packaged milk. Enjoy is also taking advantage of Egypt’s increasingly sophisticated market base, advertising its flavored milk as a vitamin- and calcium-rich treat for children. The company also emphasizes the convenience of its ready-to-use packaged milk versus the inconvenience associated with boiling milk purchased from traditional suppliers.

Another company, affiliated to the food industry, is Tetra Pak, which designs containers and packaging methods that enhance the shelf-life of edible products. With the country’s food processing and dairy companies increasingly concerned with preserving food quality, it is too an indirect beneficiary of changing consumer attitudes.

Part of the Swedish Tetra Laval Group, Tetra Pak supplies equipment, packaged materials and technology to food processing and dairy companies such as Juhayna, Enjoy, Greenland, Heinz, Milkyland, Arab Dairy, Faragallah and ElMisrieen. Early in the 1990s, Tetra Pak—a producer of packaging equipment and materials—bought out Alfa Laval, an expert in food processing. Both companies are active in Egypt.

Tetra Pak provides its food processing and dairy sector clients with training on equipment use and maintenance. The company is often hired to assist clients in designing the packaging.

Although Tetra Pak is the leading supplier of packaging materials and equipment in the local market, it still faces some competition from foreign suppliers. Tetra Pak's competitors also sometimes package imported processed food. – (Albawaba-MEBG)